No clear road to capital's light rail

Newcastle residents were recently promised the first stage of a light rail system that could help transform the NSW city's central business district. But the project will only go ahead if a potentially unpopular privatisation also proceeds.

The NSW budget included a promise of $340 million for the replacement of heavy rail infrastructure with light rail between Wickham and Newcastle.

In exchange for the $340 million, the people of Newcastle will see their port sold by the NSW Coalition government for about $700 million.

In our own backyard, those of us who first glimpsed artists' impressions of trams or buses running down the middle of Northbourne Avenue when we were small children are told we will soon see the real thing.

The first tracks for a light rail line between Civic and Gungahlin are due to be installed before the 2016 election.

The green grass on Northbourne Avenue is waiting to be torn up, but the light rail tracks will need somewhere to go when they turn on to Flemington Road towards Gungahlin.

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There's enough land beside Flemington Road for rail tracks and that land might also help the government solve another problem: how to pay for the Capital Metro.

Stage one of Newcastle's light rail will be financed with proceeds from the port privatisation.

Similarly, in a celebrated episode of The Simpsons, the people of Springfield used the proceeds of a fine imposed on the villainous Mr Burns to purchase a second-hand monorail.

But barring an unexpected windfall profit, the ACT government will have to borrow to build its light rail network.

Selling land along the light rail corridor would deliver big profits to the government and potentially help pay off the infrastructure.

One possibility is selling Thoroughbred Park and/or Exhibition Park.

With easy access to the Metro, high-density housing or commercial developments, the sites could be very profitable.

EPIC and Thoroughbred Park could be relocated elsewhere, possibly to the Majura Valley.

Creating more housing density - along Northbourne Avenue and potentially on the EPIC and Thoroughbred Park sites - would help build a customer base for the Capital Metro.

Regardless of how much land it sells, or customers it attracts, the government knows the Capital Metro is unlikely to make a profit, or even break even.

The likely cost of the project was estimated last year to be about $614 million, but an official budget is yet to be finalised.

Like Lisa and Marge Simpson's sceptical views of the Springfield Monorail, the ACT Liberal opposition is not sure building a light rail system is the best use of public funds.

And the government is yet to do the work needed to persuade influential government advisory body Infrastructure Australia of the merits of light rail.

In a report published this week, IA suggested new bus lanes be created on Northbourne Avenue, but didn't mention trams.

Without inclusion on IA's priority infrastructure list, the ACT has little hope of attracting federal government or private sector investment in the project.

Treasurer Andrew Barr plans to attract a private sector partner or partners to help build and operate the Capital Metro.

Barr has not tried to hide the fact taxpayers will carry all of the financial risk related to passenger numbers.

Like ACTION buses, the government expects the network to require a continuing subsidy.

A failure to publicly justify and then contain that subsidy to a level the community will accept could be a political disaster for the Gallagher government.